Watch Now


Forward Air’s recalculated Q1 shows improved leverage ratio

New adjusted EBITDA number provides additional breathing room to debt covenant

Forward Air says additional cost reductions should boost second-quarter EBITDA by $20 million. (Photo: Jim Allen/FreightWaves)

Forward Air issued an update to first-quarter results, showing more breathing room to an upcoming debt covenant.

The company said “after performing a thorough assessment of all available addbacks permitted under the credit agreement,” its adjusted earnings before interest, taxes, depreciation and amortization increased from $300 million to $324 million for the 12-month period ended March 31. The new EBITDA number placed its net debt leverage ratio at 5.1 times versus the 5.5 times previously announced. That compares favorably to a required threshold for debt leverage to be less than 6 times during both the second and third quarters.

The adjusted calculation excludes several one-time costs and expenses tied to the acquisition of Omni Logistics. Forward’s (NASDAQ: FWRD) credit agreement was amended in mid-February, not long after it closed on a controversial merger with Omni.

“We wanted to provide this adjustment to our first quarter reporting as part of the new leadership’s commitment to increased transparency,” said CEO Shawn Stewart in a late Thursday news release.


Forward also announced Thursday that it has “taken further cost reduction actions,” which it expects will boost second-quarter EBITDA by $20 million.  

Those actions may include recent headcount reductions. Several sources confirmed to FreightWaves last week that the company has eliminated approximately 150 positions.

“We are aggressively taking action to improve profitability, maximize synergy capture and drive our leadership in global supply chain and domestic transportation services so that we can create value for our customers, employees and shareholders,” Stewart added. “We are focused on execution and continue to be optimistic about the opportunities ahead and our long-term growth trajectory.”

On its first-quarter call in May, the company couldn’t commit to being cash flow-positive during the second quarter. No reference to cash flow from operations in the current period was provided in the Thursday update.  


The company previously said it expects to deleverage the balance sheet to 4.5 times (net debt-to-adjusted EBITDA) by the end of 2025.

More FreightWaves articles by Todd Maiden

Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.